Increased profit margins? Check. Extra staff? Check. Charles Beaudet keeps making progress.
November 11 / 12:00 p.m. pst / Las Vegas, NV /
EIGHTY DAYS – if it’s enough time to make it around the world, it’s certainly long enough to revitalize a jewelry store. At least, that’s been Chuck Beaudet’s motto. Since Scull & Co. delivered their final consultative analysis of Beaudet Fine Jewelry August 29, Beaudet and his wife Georgiann have been hustling to get as many changes in place as possible before the holidays.
With more funding needed for an upcoming location change and increased marketing costs, low profit margins were the first item under attack. In just two months since the consultation, Beaudet’s YTD average margin has climbed from 36% to 39%. “We’ve made changes to our pricing structure and have been able to improve profitability, despite additional overhead from employees and higher gemstone prices,” says Beaudet. The first area to see price increases was custom design, which did not require changing any price tags.
Beaudet says there’s still room to grow, and Scull agrees. “I’m happy with his increase in margin but am pushing to keep going,” says Scull lead consultant Sharee Coffey. “Chuck said that not one person has made a comment, so I think he can still afford to go further.”
To better understand which departments are profitable and which are not, Beaudet is overhauling his inventory management program according to Scull advice. In the process, he’s been shocked by one major revelation: custom design accounts for more than half of the store’s business (not 20%, as he previously thought). “We were breaking out custom design charges as a separate category before. When we added back in the diamond and colored stone sales related to the custom sales, we found that total custom-related revenues were over 50%!” says Beaudet. “No wonder I was spending all my time in the shop.”
It wasn’t easy to get these numbers. Beaudet had to hire a programmer to revamp his software program to break the figures into the categories Scull wanted. The bookkeeper had to reorganize the accounting system as well. “It was lots of work and lots of pressure at this time of year, when we’re already busy,” says Beaudet. And it’s not over – after the holidays, Beaudet plans to switch the store’s bookkeeping software to one more compatible with other applications. In the end, though, he knows he’ll be more informed than ever before. “I’m now seeing three sets of departmental information each month – both my old departments and those that Scull wants to see. And I’m seeing them by week, month, and year.”
Despite the fact that custom design must remain the store’s focus, Scull has advised Beaudet to increase “bread and butter stock” for the impulse sale. Coffey has also recommended adding new branded fashion lines to the mix, and Beaudet has added two already, with trunk shows planned for December. “I built a grid of items and price points that I wanted them to carry, and they have been good at forwarding any and all new things for me to look at first,” says Coffey. “I still want them to have a unique look, even if all the product isn’t ‘Beaudet’ designs.”
Not only has new product been added, but another part-time employee has joined the Beaudet team. Now, the two part-timers cover all the days the store is open, which has helped to free up Beaudet. He and his jeweler, Doug, have been working on making the shop more efficient as well, figuring out what can be sent out for casting and what must be done in-house. “Scull had asked us to find a way to back up the shop, so that if something went wrong, we had a contingency plan in place,” says Beaudet. “Now it’s not totally dependent on us anymore.”
Despite all the improvements, Beaudet continues to bump heads with Scull on occasion. Recently, Beaudet reluctantly agreed to try a direct marketing campaign targeting past customers with gift certificates for the holidays. Says Coffey: “I really had to push for the direct marketing campaign, and had a couple of our members call to tell them of their success. Chuck and Georgiann had resistance to this idea, I’m not sure why.” However, the Beaudets eventually came around to the concept, which Coffey hopes will pave the way for both short and long-term success. “I wanted to maximize holiday sales but also get customers back in that hadn’t been in for a while,” she says. “I also wanted to try and increase exposure before the move so they could leverage their customer base for the new store’s grand opening.”
Speaking of location, one of Scull’s main recommendations was for Beaudet Fine Jewelry to find a better one. While the Beaudets have contacted the construction group responsible for rebuilding downtown Eugene, the area that Scull suggested for the new location, they’re also considering the implications of a large residential development going into the South Hills, an all-residential area. Chuck feels this could have a large impact on traffic patterns to downtown Eugene and wants to analyze the situation before moving forward. He says there’s no rush to move since his lease isn’t up for two years, but Coffey disagrees. “I still think that this is of the utmost importance,” she says. “When discussed with them originally, they said they could get out of their lease, so the two years didn’t seem to be a problem. I think that now, because things have improved, he thinks he can put it on the back burner.”
True to his nature, Beaudet is surveying all of his options carefully. And yet, unlike before, he’s now found the path he wants to take for his business, and is moving sure-footed towards his destination. But where will his customers’destination be? That remains to be decided.
SPECIAL REPORT
What Follows ?What Next??
In INSTORE’S October edition, we followed Charles and Georgiann Beaudet as they addressed the problems facing their business with help from consultants Scull & Co. This is part of a periodic series in which we follow the progress of the Beaudets.